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Ready for YouTube’s Networks

BETHESDA, MD.—
How often does an
18,000-attendee
trade convention
deal with “chaperone
and parent” issues or offer
free badges for “ages
8 and younger?” VidCon,
which focused on all
things YouTube, faced
those logistics at its fifth annual conference
and trade show at the Anaheim Convention
Center in late June—reflecting the young
demographics of the YouTube world.

More significantly, the scope of VidCon,
up from 1,400 attendees in 2010, and the
presence of major Hollywood studios—
many of them already working with You-
Tube—vividly recognized that network
TV channels (or “multichannel networks,”
“MCNs” as the industry dubs them) are no
longer limited to the world of broadcasting
and cable.

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These online channels offer vast, well-watched
networks and not just for the
young.

VidCon took place amid a slew of developments
that will further establish You-
Tube’s networks as a viewing destination
for digital audiences. At the conference and
in the weeks afterwards, organizations in
the YouTube universe unveiled plans that
will solidify and inevitably expand the
Google subsidiary’s role in the competitive
viewing landscape, such as:
• The imminent debut of fee-based YouTube channels;
• Technical support programs from companies
such as Dolby, RED and Samsung;
• Support for frame rates of 48- and
60-frames per second, which will boost
the appearance of motion-intense
scenes (especially valuable for video
games);
• “Fan funding,” which enables supportive
viewers to “tip” their favorite channels
with sums from $1 to $500;
• “The YouTube 15,” a popular music hit
list produced by SiriusXM. The weekly
show, which debuted in early July, features
the top music and video playlists,
based on YouTube data;
• A plan by FullScreen, a YouTube network,
to let “star” creators charge fans to
see programs during an exclusive “viewing
window” before non-paying viewers
can access those videos;
• A service by Tubular, a digital marketing
platform, that alerts YouTube creators
via Twitter about how much viewing
their content is receiving, and
• A subtitling translation service that will
assist global viewers. With 60 percent of
YouTube video views coming from outside
a channel’s home country, YouTube
wants to facilitate international access to
content; field tests showed an 8 percent
increase in views for the subtitled videos.

YouTube’s Space LA supports the production of videos by up-and-coming producers.

AND THERE’S MORE
Moreover, several new research reports
confirm the strength of YouTube viewership.
For example, Adroit Digital, a media buying agency specializing in programmatic
buying, contends that more people watch
YouTube videos (68 percent of respondents
to its April survey) than watch live broadcast
TV shows (50 percent). Adroit’s free report,
“Online Video: Look Who’s Watching Now,”
acknowledges that with digital video recorder
viewing (30 percent of respondents), the
overall TV audience is far larger; but it makes
the point that broadband video viewing has
become a significant alternative/addition to
conventional TV.

Admittedly, the short viewing times for
YouTube and similar broadband videos, as
noted in the Adroit study, differ substantially
from the broadcast and cable viewing
experience. Nonetheless, with its dedicated
channels and high-profile, targeted content,
YouTube increasingly is becoming a part of
the “TV network” array.

Under those conditions, not surprisingly,
legacy TV companies are buying into the
broadband MCN juggernaut. For example,
“Tastemade,” a network of online food channels
that run on YouTube, recently received
a $25 million investment from, among others,
Liberty Media and Scripps Networks
Interactive (the same parent company that
owns Food Network, Cooking Channel and
Food.com). The two-year-old online network
company positions itself in contrast
with legacy TV channels:

“A generation ago the cable industry
launched category-defining brands in food
and lifestyle,” Tastemade explains on its
website. “We believe the same opportunity
exists for today’s global, social and mobile
digital platforms.”

At the VidCon convention, which attracted
far more grownups than the chaperoned
teens and younger creators, Dream-
Works Animation CEO Jeffrey Katzenberg
described an “ocean of opportunity” and
called “this world of short-form video... an
amazing place to create laughter.” He and
other VidCon speakers focused on the expanding
number of channels that YouTube
carries, thus fulfilling the company’s plan to
re-invent the TV structure, but with a broader
array of branded channels.

Katzenberg acknowledged that “monetizing
[this platform] is still a struggle.”
But he expects to see within five years,
that first-rate content will “migrate up to
the top of the pyramid,” with 5 percent of
video creators generating “95 percent of
the value.”

To back up his enthusiastic predictions,
the DreamWorks mogul has committed
substantial resources to YouTube’s online
video lineup. In particular, Katzenberg
cited his studio’s $33 million purchase
last year of Awesomeness TV a U.S.-based
sketch comedy reality series. More significantly,
DreamWorks Animation has turned
over to Awesomeness some of its valuable
properties, such as “Shrek” and “Po the Panda”
along with characters from its recent
Classic Media library for Awesomeness to
create short, animated productions.

HELPING THE VIDEO CREATORS
In addition to the activity in Anaheim, the
week included updates at YouTube Space
LA, a two-year-old production venue near
Venice. The Dolby Institute, in collaboration
with RED Digital Cinema, offered a two-day
workshop on tactics and techniques to improve
video images and audio. YouTube’s
“Space LA,” like similar facilities in New York,
London and Tokyo, supports the production
of videos by up-and-coming producers.

Dolby Institute Director Glenn Kiser
was quoted characterizing the training program
as one that encouraged participants
to “think much more critically about sound
as they head out to shoot their next round
of projects.”

Meanwhile, back at VidCon, the sponsor
and participant list offered evidence about
the attention that legacy media companies
and advertisers are devoting to broadband
video. NBC Universal, Disney (via its recently
acquired $500 million online video
Maker Studio), Endemol Beyond USA, a unit
of the global production and TV program
licensing company, and HLN (the Time-
Warner network formerly known as CNN’s
Headline News, now repositioning itself
as a social media network), were on hand,
as were sponsors such as Kia Motors, Samsung,
Best Buy and Taco Bell.

YouTube CEO Susan Wojcicki, who assumed
the top role five months ago and
was making her first appearance before the
core creative community, promised VidCon
attendees that, “The whole platform is being
redone in a way that’s never been done
before.”

She described the revamps and new features
as ways to engage a bigger and global
audience, build a successful business and
manage creative work.

In other words, YouTube is beginning to
look a lot like television.

Gary Arlen is president of Arlen Communications
LLC, a research and consulting
firm. He can be reached atwww.ArlenCom.com.